Topic

Unobserved Mechanisms (joint paper with Michael Peters)

Abstract

Using a well known environment where buyers have identically and
independently distributed private values for an object, we model
mechanism design without full observability as a game of imperfect
information in which some buyers may not be informed
of the commitments made by the seller of the object. Informed buyers
can pretend to be uninformed but uninformed cannot pretend to be
informed. In equilibrium, the seller holds an auction among informed
buyers with a reserve price that depends on how many
informed buyers there are. This reserve price is kept secret from
informed buyers when they report their values.